Wednesday, May 6, 2020

Balance Sheet and Value - 1691 Words

Learning Goal 6: Explain the relationships among financial decisions, return, risk, and the firms value. 1) Any action taken by the financial manager that increases risk will also increase the required return. True or False 2) In common stock valuation, any action taken by the financial manager that increases risk will cause an increase the required return. True or False 3) In common stock valuation, any action taken by the financial manager that increases risk will cause an increase in value. True or False 4) An action on the part of a firm that increases the level of expected cash flows without a corresponding increase in risk should reduce share value; An action that reduces the level of expected cash flows without a†¦show more content†¦True or False 6) The book value per share of common stock is the amount per share of common stock that would be received if all of the firms assets were sold for their accounting value and the proceeds remaining were divided among common stockholders. True or False 7) ________ is the value of the firms ownership in the event that all assets are sold for their exact accounting value and the proceeds remaining after paying all liabilities (including preferred stock) are divided among common stockholders. A) Liquidation value B) Book value C) The P/E multiple D) The present value of the common stock 8) ________ is the actual amount each common stockholder would expect to receive if the firms assets are sold, creditors and preferred stockholders are repaid, and any remaining money is divided among the common stockholders. A) Liquidation value B) Book value C) The P/E multiple D) The present value of the dividends 9) ________ is a guide to the firms value if it is assumed that investors value the earnings of a given firm in the same way they do the average firm in the industry. A) Liquidation value B) Book value C) The P/E multiple D) TheShow MoreRelatedThe Value Of The Balance Sheet1343 Words   |  6 PagesThe main purpose of the balance sheet is to reflect and explain the accounting equation: Assets = Liabilities + Owner’s Equity. This equation is the fundamental model for recording and reporting transactions. 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Read MoreThe analysis and application of the balance sheet1732 Words   |  7 Pagesï » ¿ The analysis and application of the balance sheet Kuang xin Financial accounting is one of the most popular major in the world. In the study of accounting, people must know and use expertly the three accounting statement, balance sheets, cash flow, and income statement. It is the most basic and useful skill in one’s career of accounting. But in the four basic financial statement, the balance sheet or called statement of financial position is theRead MoreMULTIPLE CHOICE With Answers980 Words   |  4 Pagesï » ¿MULTIPLE CHOICE 1. The balance sheet reports a. assets. b. revenue. c. expenses. d. net income. ANS: A DIF: Easy OBJ: LO 5-1 MSC: AACSB Communication 2. The fourth pair of columns on a 10-column work sheet prepared at the end of the period would be the a. Income Statement columns. b. Adjustments columns. c. Balance Sheet columns. d. Adjusted Trial Balance columns. 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